Cognyte Software reports 21% software revenue growth, bolstered by federal security contracts and a strategic shift toward subscription models, despite $7 million in FX-related expense pressure.
The USD/ILS exchange rate is a critical factor for Cognyte, as the company reported that a weaker U.S. dollar against the Israeli shekel negatively impacted operating expenses by approximately $7 million in the first half of the fiscal year. This currency headwind highlights the company's exposure to fluctuations in the shekel, which can directly affect profitability metrics despite strong operational performance.
The weaker U.S. dollar against the Israeli shekel resulted in approximately $7 million of additional operating expenses during the first half of the year.
Cognyte Software reported a 21% year-over-year surge in software revenue, driven by robust demand for sovereign AI solutions in the national security sector. While the company faces short-term foreign exchange headwinds from a weaker USD against the Israeli shekel, management maintains a clear path toward its $500 million fiscal 2028 revenue target.
Growth is primarily driven by increased government demand for national and border security intelligence, alongside a strategic transition to subscription-based software models.
Cognyte is intentionally increasing inventory levels to mitigate long lead times and rising hardware costs, ensuring they can meet demand for on-premise deployments.